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Indian equity benchmarks delivered a fourth consecutive session of gains, with BSE Sensex closing approximately 370 points higher, while Nifty50 ended just below 25,000, crossing 24,950. Optimism stemmed from strong performances by Reliance Industries and Bharti Airtel, which helped fuel the rally. The market's positive momentum was largely fueled by sustained foreign institutional investor (FII) buying and lingering optimism from last week's GST rationalization discussions.

Buy: L&T Finance Holdings(current price: ₹ 217)

On Tuesday, Indian benchmark indices extended their rally, with both Nifty 50 and Sensex closing in the green for the fourth consecutive session. After a muted opening, the market extended its bullish momentum from the previous session and ended just below 25,000. The broader market outperformed the frontliners, with the BSE Midcap and Smallcap indices gaining around 1% each. 

On the sectoral front, oil and gas, media, and auto stocks led the gain, while pharma was the sole laggard. Notable stock movers included Tata Motors, Adani Ports, and Reliance Industries among the top gainers, while Dr. Reddy's Labs and Cipla were among the day's biggest losers. The overall market breadth was highly positive, with a strong advance-decline ratio, suggesting broad-based buying interest across the board.

On the technical front, Nifty encountered resistance at its 50-DMA, which remains a key hurdle for further upside. The relative strength index (RSI) has recovered from oversold territory and recently broke above a downward-sloping trendline, now consolidating near the neutral 55 level—indicating improving momentum. Meanwhile, the MACD has turned positive, though it continues to trade below both its signal line and the zero axis, suggesting that while downside pressures have eased, a sustained confirmation of trend reversal is still awaited.

According to O'Neil’s methodology market direction, market status has been downgraded to an "Uptrend Under Pressure" as Nifty breached its "50-DMA" and the "distribution day count" is at four.

The index continues to encounter strong resistance near its 50-DMA, with 25,000 and the 50-DMA is likely to remain the key resistance zone in the near term. A decisive close above this hurdle would be a constructive technical development and could open the path for an upside move toward 25,250–25,350. On the downside, immediate support is placed at 24,700, where a breach could negate the current recovery attempt and reintroduce selling pressure. Below this, further supports are seen at 24,600 and 24,350, making these critical levels to watch for the index’s next directional move.

On Tuesday, Bank Nifty began on a weak note and witnessed volatile movement in the early hours of trade. However, buying interest at lower levels provided positive momentum, helping the index close in the green. It formed a bullish candle, signaling strength, though it faced resistance near its 21-DMA, placed at 25,911. Throughout the session, it opened at 55,622.30 and moved within a narrow range of 55,965.55 to 55,608.15. Eventually, it closed at 55,865.15, sustaining its intraday gains. The price action reflects resilience, though a breakout above the 21-DMA will be crucial for further upside.

The RSI has inched higher from the previous session and is now positioned near 50, indicating improving momentum. Meanwhile, the MACD has turned positive after several weeks of a negative crossover, though it continues to trend below the central line, signaling caution. According to O’Neil’s methodology market direction, Bank Nifty remains in an “Uptrend Under Pressure." In this context, investors should maintain a selective exposure to quality stocks while emphasizing disciplined risk management to safeguard capital and capture only high-conviction opportunities.

Bank Nifty closed the session in positive territory but faced resistance near its 21-DMA. A sustained move above this level could open the path toward the next hurdle at the 50-DMA, placed around 56,330. For bullish momentum to strengthen, the index must decisively cross and hold above the 50-DMA in the coming sessions. On the downside, immediate support lies at the 100-DMA near 55,239. A breach below this level may trigger heightened volatility and increase the risk of further downside.

MarketSmith India is a stock research platform and advisory service focused on the Indian stock market. It offers tools and resources to help investors make informed decisions based on the CAN SLIM methodology, founded by legendary investor William J. O'Neil. You can access a 10-day free trial by registering on its website.

Trade name: William O’Neil India Pvt. Ltd.

Sebi Registration No.: INH000015543

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.

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